Depreciation Methods

12/08/2008 21:02

 

Depreciation Methods:

Learning Objectives:

  1. What are the various methods for depreciation?

Fixed assets differ from each other in their nature so widely that the same depreciation methods cannot be applied to each. The following methods have therefore been evolved for depreciating various assets:

  1. Fixed installment or Straight line or Original cost method.

  2. Diminishing Balance Method or Written down value method or Reducing Installment method.

  3. Annuity Method.

  4. Depreciation fund method or Sinking fund amortization fund method.

  5. Insurance policy method.

  6. Revaluation method.

  7. Sum of the year's digits method (SYD).

  8. Double declining balance method.

  9. Depletion method.

  10. The basis of use system.